Defying SEC: Solana, Cardano, and Polygon Disagree with ‘Security’ Label

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Lockridge Okoth

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Lockridge Okoth

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October 23, 2023 06:22 EDT

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In an ongoing battle against the Securities and Exchange Commission (SEC), Solana, Cardano, and Polygon have united forces to challenge the classification of their cryptocurrencies as securities.

This comes as lawsuits unfold against major exchanges Binance and Coinbase, these prominent projects are pushing back, seeking regulatory clarity that fosters innovation while safeguarding consumer interests.

Our token is non-security, and we urge regulators to collaborate for clear regulations that strike a balance between innovation and consumer protection,” stated a spokesperson from the Solana Foundation

Solana, Cardano, and Polygon Challenge SEC’s ‘Security’ Label, Advocate for Regulatory Clarity

Defying the SEC’s assertions, Solana (SOL), Polygon (MATIC), and Cardano (ADA) have boldly challenged the recent classification of their cryptocurrencies as securities.

The @SolanaFndn Foundation Challenges SEC's Classification of SOL Token as a Security! 🚫⛔️

According to their response tweet, the #Solana foundation publicly disagrees with the SEC's characterization of its native token, $SOL as a security$SOL is currently @ $15.07 per token pic.twitter.com/trTPVEfDJE

— Whitepaper (@whitepaper_io) June 12, 2023

The SEC included these tokens, among others, as examples of allegedly non-compliant assets traded on major crypto exchanges, leading to lawsuits against Binance and Coinbase. Notably, their prices have recorded stark drops.

Blockchains #Solana, #Cardano, and #Polygon have plummeted over 20% in the past 24 hours⁉👀

The downtrend is caused from the lawsuit filed by the SEC against @Binance and @coinbase 📢

The SEC claims that 13 tokens listed on these #cryptocurrency exchanges are securities⚠ pic.twitter.com/1EmhJ2Hec6

— Whitepaper (@whitepaper_io) June 11, 2023

With a combined market capitalization exceeding $21 billion, these tokens hold significant industry standing, rivaling even Ethereum (ETH).

Cardano, Solana Defend Regulatory Statuses of their Tokens

In response to the SEC’s claims, Cardano and Solana, supported by their respective organizations, staunchly defended the regulatory status of their tokens.

Input Output Global (IOG), the firm behind Cardano, maintains that ADA has never been considered a security under U.S. law.

IOG expresses confidence in its continued operations and welcomes a collaborative approach with regulators to foster innovation while protecting consumers’ interests.

Similarly, the Switzerland-based Solana Foundation voiced its disagreement with characterizing Solana as a security on Twitter.

“The Solana Foundation strongly believes that $SOL is not a security,” — Solana Foundation pic.twitter.com/PAXJtX1sdE

— BET (@_BET_Token) June 11, 2023

The foundation also emphasized its commitment to working with regulators, citing the necessity for clear regulatory guidelines in the digital asset space.

However, discussions have emerged within the Solana community about potentially forking the network to address regulatory concerns and mitigate the impact of potential market flooding resulting from FTX’s bankruptcy.

OK hear me out. It's time to fork $SOL. SEC dissapears, FTX bankruptcy can dump on themselves. $BTC and $ETH both did it.

cc @SOLBigBrain

Your reaction?

— Caps (@capsjpeg) June 10, 2023

Solana Community Contemplates Network Forking

The idea of forking the Solana network has gained traction, with proponents citing Ethereum’s successful fork following The DAO hack in 2016.

Such a fork could potentially resolve regulatory challenges and mitigate the effects of a significant number of Solana tokens owned by Alameda Research, the trading firm of former FTX CEO Sam Bankman-Fried, flooding the market in the coming years.

Nevertheless, the ongoing debates within the Solana community highlight blockchain networks’ challenges in navigating regulatory frameworks, and despite market volatility, crypto ecosystems remain resolute in their mission to defend their positions and shape the future of the cryptocurrency industry.